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Professing that it will not sit back and watch its customers be potentially forced to purchase Linux licences from The SCO Group, Hewlett-Packard Co. on Wednesday announced it will offer indemnification to customers purchasing HP Linux distributions after Oct. 1, provided the source code has not been modified.

In a teleconference Wednesday morning, Martin Fink, vice-president of Linux, HP enterprise servers and storage, explained that HP is protecting its customers and will go to bat to defend them against SCO’s claims that Linux is an unauthorized form of its Unix source code, in the event that SCO decides to go after Linux users.

“While other vendors sit on their haunches…we are taking a stand against unnecessary litigation,” Fink said. “We are giving the green light to our customers to move forward on Linux development…and (we are) truly responsible and accountable to our customers and to the Linux community at large.”

SCO turned the Linux world upside down in March when it filed a lawsuit against IBM Corp. that now seeks US$3 billion in damages, alleging that IBM illegally contributed SCO’s System V Unix code into the Linux open-source project to benefit IBM’s business. IBM filed a countersuit against SCO last month, asserting that SCO has actually infringed on IBM’s patents and is in violation of the license that governs contributions to Linux. [Please see IBM files counter lawsuit against SCO.]

SCO said last month that it would offer a US$699-per-processor fee for the SCO Intellectual Property License for Linux, which would allow corporate users to run Linux on their servers in binary form only without violating SCO’s intellectual property rights. Only one unnamed company has so far signed up for the special license, according to SCO.

In order for existing customers to qualify for the indemnification against SCO’s claims, HP is requiring that customers sign an addendum ensuring that their existing deployments meet the requirements of new deployments. Fink noted that provided customers have standard support agreements in place – which typically come with HP Linux distributions – they will be covered.

“Basically, as long as you have purchased Linux from HP and have not changed the source code, we will give defence on your behalf and assume the liability on your behalf as a customer,” he said, but added that HP will take a case-by-case approach to customers that have changed parts of the source code in minor ways. The company is in the process of setting up Web sites to deal with the case-by-case scenarios.

The announcement essentially changes the face of indemnification completely, according to Bill Claybrook, research director, Linux and open source software with Boston-based Aberdeen Group.

Claybrook observed that most companies like HP, which deliver third-party proprietary software, generally leave indemnification up to third-party suppliers. But, as there is no third-party supplier with Linux, Claybrook said HP’s move puts the company “way ahead of everybody.”

“[HP] is indemnifying all of the [Linux] software and not just the kernel,” Claybrook said. “This is a first for anybody…nobody does this even with proprietary software that I know of.”

With HP making such a strong statement, Claybrook said its competitors may not have a choice but to follow suit in order to keep up their own Linux distributions.

“I think this gives HP a huge step up in terms of selling and marketing its products,” he continued. “If I am a Linux user and I have any doubts or any questions or I just want to feel safe, then why would I not go out and buy HP if they satisfy my business requirements? This is an extremely strong statement and I think that HP has found that (its own) risk is not all that high. I think they have decided that SCO will not win this lawsuit…so what is the risk to HP? Not that much.”